By Staff Reporter |
Arizona Treasurer Kimberly Yee is advocating for reforming the Empowerment Scholarship Account (ESA) Program to reduce improper spending.
The treasurer’s office manages the contract with the vendor operating the portal through which ESA holders submit reimbursement payments.
Yee shared that she directed her office to seek out vendors proposing to innovate better means of facilitating the expanding ESA program. The treasurer’s office will publish a formal request for information to secure a platform better suited to support the current scope of the program.
Over 100,000 families participate in the ESA Program.
“If there is a financial platform, or are updates to the current platform, that can provide families ESA program funds efficiently and identify any misspending or misuse, then Arizona taxpayers deserve to use that system,” said Yee.
Yee announced her RFI plan following a public dispute between Arizona Department of Education (ADE) Superintendent Tom Horne and the media over fraud, abuse, and waste within the ESA Program.
Horne maintains the program has low levels of those problems, but 12News argues they’re much higher.
12News claimed based on a risk-based audit that 20 percent of purchases under $2,000 within the ESA Program were fraudulent. Horne disputed that total as a “ridiculous” misunderstanding of data.
“Only 20 percent of that 20 percent were improper — that’s only four percent,” said Horne in an interview with KTAR News. “The other thing to know is, [those improper expenditures are] not all fraud. A lot of times it’s innocent mistakes, a paper that needs to be submitted, things that people think are okay but don’t fall into our standards. The amount of actual egregious purchases or fraud is 0.3 percent.”
The 0.3 percent figure came from a randomized study by a Stanford PhD, per Horne, which reviewed 3,000 random ESA orders between July 2025 and February 2026.
12News relied on public records to estimate in a report published last month that misspending “could” amount to 20 percent of all purchases in the ESA Program. According to their report, at least 18,000 of the 102,000 ESA Program participants had one or more unallowable purchases over the course of one year, which amounted to nearly 84,000 unallowable purchases.
Horne has demanded that 12News issue a retraction of their reporting perpetuating the 20 percent claim.
“A ridiculous figure of 20 percent fraud has been circulating concerning ESA purchases which resulted from a total misinterpretation of data provided to Channel 12. The 20 percent figure represented program participants that ADE had selected for risk-based auditing,” said Horne in a press release last week. “Continued use of the 20% fraud allegation is an outrageous misrepresentation to the public that must stop.”
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